Vermont utility regulators have greenlighted the Lowell wind project, the state’s largest wind development to date.

The Public Service Board issued a certificate of public good allowing Green Mountain Power and its partners, Vermont Electric Cooperative and transmission company VELCO, to erect 21 turbines on Lowell’s ridgeline in a project called Kingdom Community Wind.

“After careful consideration of the comments raised by parties and the public and the evidence in the record, we find that, subject to a number of conditions set out in this order, the proposed project will promote the general good of the state and the petitioners [GMP] should be granted a certificate of public good,” PSB members James Volz, David Coen and John Burke wrote in the order made public Wednesday morning.

The wind turbines would have the capacity to provide 63 megawatts of electricity, enough for 20,000 homes, GMP states. GMP is expected to have the turbines operating before the end of 2012 to secure $40 million in federal production tax credits to pass on to consumers, they say.

Construction is expected to start in August.

The board set many conditions for GMP to meet before breaking ground.

“We are fully aware of the potentially significant impacts of the proposed project,” the board wrote. “A number of parties have expressed concerns over whether the project will cause undue adverse effects with respect to wildlife habitat, aesthetics, and noise, as well as questioned whether this particular power source is needed and whether it would provide an economic benefit to the state at all.”

The board members said they took these impacts into account.

“The two primary conditions we adopt relate to mitigation of certain environmental impacts and ensuring there is a sufficient fund to properly decommission the proposed project upon cessation of commercial operations,” the board wrote.

The three board members differed over turbine noise compensation.

“Noise from the proposed project will likely be audible at residences surrounding the proposed project,” Coen and Burke wrote. “The potential for adverse noise impacts from the turbines is an important concern for the board and one of the principal concerns raised by the parties in this case.”

However, they said, the board cannot deny a certificate of public good “based solely on the fact that a project may now, or in the future, negatively impact an individual landowner’s property rights.”

By a two-to-one majority, Coen and Burke ruled that GMP must file a plan with PSB to provide “some form of compensation to adjoining landowners” who can prove that noise would prevent them from building or subdividing on their property.

Chairman Volz disagreed in a concurring opinion.

“Where I depart from my fellow board members is in their conclusion that this board has the authority to order compensation for such loss of development rights,” he said. “Their decision goes beyond the board’s proper authority.”

Otherwise, the board is united in support because of the economic gain.

“We also find that the proposed project will provide an economic benefit to the state of Vermont in the form of jobs and tax revenues,” the three said.

They called it “the first large-scale generation facility proposed by one of Vermont’s investor-owned regulated utilities since the Searsburg wind project was approved in 1996.”

GMP owns the Searsburg turbines.

Lowell wind “will also provide GMP and VEC with a longterm source of stably priced power,” the board members said. “These economic benefits, coupled with the fact that the addition of a renewable source of power in the region is consistent with the state’s legislated policy goals, have led us to conclude that we should approve the proposed project.”

Mary Powell, GMP president and chief executive officer, said the multiple conditions that GMP has to meet before breaking ground is consistent with other major energy projects in Vermont, such as the Sheffield wind project.

“Kingdom Community Wind will produce the lowest-cost new renewable energy for our customers,” Powell said. “This project will bring economic benefits to electric consumers, as well as to the northeast region of Vermont, and we are pleased that the board agreed.

“This cost-effective, locally produced carbon-free power source is a key part of meeting Vermont’s goals for new renewable energy,” Powell said.

Vermont Electric Cooperative will buy some of the electricity at cost.

David Hallquist, chief executive officer of VEC, called the Lowell wind project “the most significant renewable energy project built in Vermont since the 50 megawatt McNeil wood generating plant was built in the 1980s” in Burlington.

VEC members and the board must approve a new transmission line and upgrades. GMP will pay toward the cost of the upgrades for new VEC transmission lines and upgrades, GMP officials said.

A second hearing on stormwater permits for the project and the transmission line is today at 6 p.m. in Lowell Graded School.

Liz Miller, commissioner of the Department of Public Service, said the Lowell wind project “represents an important step toward a more secure and renewable energy future.”

Construction of the $150 million project is expected to create hundreds of direct and indirect jobs, GMP said. Powell said GMP is committed to hiring as many local people as possible while drawing on regional wind experts.

The Town of Lowell backed the project by an overwhelming margin at town meeting in 2010. But some neighbors banded together to form the Lowell Mountain Group to oppose the project.

Luke Snelling of Energize Vermont said the ruling is “lopsided in favor of GMP.”

“Parties presented extensive evidence on noise and setbacks, including evidence that contradicted GMP’s expert testimony, only to find that none of it was cited in the decision,” Snelling said on behalf of all opponents.

Jared Margolis, attorney for Albany and Craftsbury, was disappointed that the board discounted their evidence on noise and health effects.

“We went to great lengths and expense to ensure the board understood how noise from this project would impact the surrounding residences, and why what they were hearing from GMP was only part of the real story,” Margolis said.

“But there is almost no indication that the evidence influenced the decision. We are disappointed to say the least,” he said.

“It’s as though we weren’t even there.”

Steve Wright, a member of the Craftsbury Conservation Commission, said the many conditions require citizens and communities to stay involved in the process at personal cost.

“The only way that we can represent our communities’ interests is to maintain an unreasonable, exhausting, and costly level of engagement for many, many months in the future,” Wright said.

“Is this what the PSB expects? The Lowell permit is a good example of how the current system is broken,” Wright said.

Annette Smith, executive director of Vermonters for a Clean Environment, questioned the two-week window that opponents have to respond to the many GMP plans that still must be submitted.

Snelling called the situation unfortunate.

“This started with the Sheffield wind project case, and continues with Lowell. … We doubt GMP can comply with all the conditions of this permit, and anticipate that many of them will lead to further controversy and possibly litigation.”

He expects a variety of appeals from opponents.

Once the turbines begin operating, GMP will pay as much as a half-million dollars annually to the town of Lowell in taxes for the life of the 25-year project.

Five neighboring communities that border the project will also receive smaller payments under GMP’s Good Neighbor plan.

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